81–90 of 318 posts
Earlier quoted context omitted.
Buying a condo is half buying and half renting.
A condo somehow combines the worst aspects of buying and renting.
> The Flexibility of Renting Is Undervalued And the stability of buying is undervalued. It's telling that this article frames housing as an investment vehicle rather than as a basic necessity. And it's not just a necessity because it shelters you from the elements and gives you storage for your stuff; it anchors you in a neighborhood and allows you to begin forming a local community. The flexibility of renting that t…
We need, as a society, to bring back generational communities.
Our workplaces are not our families!
I'll also add, that once you have children, owning your home is a very welcome level of stability.
Nothing worse than looking for a new rental and potentially being forced to upend all your routines and find new schools for the kids as you cant rent in the same area anymore!
Earlier quoted context omitted.
Buying a condo is half buying and half renting.
As an approximation, condo fees make explicit a number of recurring costs that are only implicit when you own. E.g. heating/cooling, maintenance, landscaping, accumulating an emergency fund, etc. Thus, if a condo is half-renting, so is buying a house.
There are A LOT of costs which are not explicit when owning a condo.
If renting doesn’t make sense economically, how is it profitable for the landlord? Because it’s almost always profitable for the landlord.
Because of the price, and the market willing to pay that price. If nobody was willing to pay $2500 for an apartment, nobody would rent it, and the landlord wouldn't have any money. For one person that can't afford a place, there are 10 who can. So landlords quite naturally match the market demand.
I've seen these critiques for years. and while its not necessarily wrong, I believe it under weights a few points: - Fixing your housing costs against inflation: You can't count on housing price increases, but you can count on inflation. If you buy a house and your mortgage payment is > rent. Overtime it will naturally flip. $1 no longer buys me a chocolate bar, and $800/month no longer gets me a 2 bed apartment. - L…
Any sort of serious buy vs rent calculator already takes this into account, for instance the one on nytimes
>- Capital Battery: As I build equity in my home it can become an asset I take loans against to pursue other opportunities.
That feels absolutely insane to me, especially when you consider that by the time you built up significant amounts of equity you'll have significant commitments (eg. college age kids) and/or be close to retirement. Going 3x on S&P500 might be justified when you're a new grad, but not beyond your 30s.
>- Flexibility: Should I need to fiscally downsize I can still move out and rent out. Or rent a portion either via a suite or secondary unit
How is this more flexible than the counterfactual of renting?
That's... really not correct. And the section that follows the heading doesn't talk about (or even try to define) "investments" at all.
A home mortgage is a heavily (!) subsidized, very safe, easily-acquired and extremely leveraged investment in an asset class that tends over long terms to grow as well as anything else.
A young professional looking at a putting $100k into stocks or as downpayment on a $500k (!) mortgage is just a no brainer. Fast forward 20 years and the 5x is applied to all the appreciation.
Buy homes, folks. Worry about renting only when you're old and are making the decision as to whether to by your fifth home for cash or to finance and put the money into another asset class. The only time you decide not to is when you know a priori you can't hold the property long enough to cover the purchase overhead.
(That said: there are lots of macroeconomic and environmental reasons to think a culture where everyone should buy a home is a bad thing. But in our culture, everyone should buy a home.)
Have you ever seen a realestate agent renting? So, does that make you think - maybe ownership has more benefits!
Money is a means to an end, and being happy is a fine end. I only live once and if I can be happy, well then I've pretty much won. Also you're not going to "get rich" by renting, if (and it's a huge if) you can somehow make renting work in your financial favor compared to buying, it's going to be a tiny bit better. You're not going to 10X your income renting.
He also completely discounts the cost of moving constantly (aka "flexibility"), movers, deposits, furnishings... it's not cheap. Yeah you can move yourself (add in the cost of vehicle to make that happen) but it's going to take time, and time is money.
This is not a well thought out article.
Earlier quoted context omitted.
Who are these people who can afford $6k/month for a rental? It has to be a very small percentage of the population, yet I see these kind of numbers thrown around a lot. Statistically, I’m in the top ~5% of income earners (from the data I can find), with no debt, and I couldn’t afford $6k/month. I bought a house because I don't understand the rental market anymore. I don’t really like being a home owner, but the rent…
The $6k number is a touch high, but the answer is realistically 30-something DINKs and up. I make $150k a year, let’s say, and if I have a spouse with a corporate career let’s say it’s similar so maybe $250k-300k per year in income? Well that’s about $12,000 in income after taxes, medical, and a 10% retirement contribution. So, yes, $6k per month is house-poor numbers, but it’s workable for sure. If you’re even bette…
Maybe I’m conservative, but being house poor while making $300k is insane.
I’m thinking someone would need to be pushing $400-500k for household income. That would put them in the top 3%. I don’t get the supply and demand curve on it. Making that much, and renting. It’s an even smaller market than the full 3%.
The most convincing argument for buying housing is that it hedges you from potential large future cost of living increases. If you can’t afford repeated rent increases then the consequences will ripple through your life.
I’ve heard this pithily stated as “you are naturally short housing”.
https://thezikomoletter.wordpress.com/2012/12/10/you-are-nat...
Another newer argument is that if you think inflation could be much higher in the future, then a 30-year fixed-rate mortgage is a very attractive instrument; it’s a government-financed option. May as well benefit from it while it lasts. (If rates go down you can just re-fi.)